NAMA: Not great, but the best we have

LostinBlanch

My view on the alternative positions is that we won't be overpaying for worthless assets purely to line the pockets of FF cronies, developers and bank bond and shareholders at the expense of Sean and Sinead Citizen; and then more than likely have to pay out more to in effect nationalise the banks as even Lenihan has admitted.

Cut out the looting of the economy via NAMA and temporarily nationalise the banks, let them sort themselves out and then when they are in profit, refloat them and let the exchequer take a share of the profit. Under NAMA there is absolutely no forcing the banks to repay us any money, and you can bet they won't. So under (temporary) nationalisation even if the taxpayer has to fork out the same amount of money they aren't left with the same risk as with NAMA.

AS I see it, FG says lets set up a good bank in order to loan money, creating competition for AIB, BOI etc who will also be forced to loan credit to small businesses etc and get the economy moving again. Instead of sitting on the money that they are due to get for NAMA. Again under NAMA there is nothing to force the banks to loan money to businesses. They won't want to as bankers natural instinct is to hold onto whatever money they have and try and get as much as they can into their reserves. They will be trying to hold onto as much money as they can to make their balance sheets look better.

So in a nutshell, NAMA as currently proposed = vastly overpaying for practically worthless assets, leaving the taxpayer with all the risk and none of the gain. Banks are not required to repay the taxpayer any monies from future profits nor required to lend money into the economy to get things moving again.

EDIT: Those figures you are quoting are very suspect. It's typical FF spin to put out a blizzard of figures to try and fool people into believing NAMA is the least worst option. All this crap they came out with about well there's only 60 billion of toxic assets against 90 billion nationalisation out of 120 billion in total. They say this fast hoping that people will forget to call them up on it. Just in case you're wondering where the extra 30 billion is supposed to have come out of it's the supposed 25% that developers have put up. Something that even Jim McDaid laughed at while defending NAMA on Newstalk this afternoon.
Apologies if I haven't explained it very well but it's late and I should be drinking!

Sand

The current status quo is not tenable, so where does it leave us? Taking over €60bn of toxic assets via NAMA or €90bn via nationalisation, I'll go for the lesser of two evils.

You do understand that the 90 billion book is only worth 60 billion? At absolute best? Right? That were getting the same thing? And that were going to recapitalise the banks for any loss they make on that 90 billion anyway?

Honestly...NAMA is so blindingly, terrifyingly bad that I cannot credit that anyone other than a Fianna Failer, a banker or a builder is in favour of it. Its not like any of the aforementiond pay taxes so its win win for them.

jmayo

Sand wrote: »

You do understand that the 90 billion book is only worth 60 billion? At absolute best? Right? And that were going to recapitalise the banks for any loss they make on that 90 billion anyway?

Honestly...NAMA is so blindingly, terrifyingly bad that I cannot credit that anyone other than a Fianna Failer, a banker or a builder is in favour of it. Its not like any of the aforementiond pay taxes so its win win for them.

Got it in one ...
the ones that beneift form NAMA are ...

• bankers - the top ones get to stay in cushy jobs, their shares are worth something and the minnows coming up see a future as the next seanie fitz or fingers fingleton, or maybe even a boucher or sheedy.
• bank bond holders - they get to walk away with something from a worthless investment.
• bank shareholders - well even though they have invested in companies that to all intents and purposes are insolvent, they will continue to remain owners of these companies until they are once again profitable.
• developers - they get to park their debts, they are not foreclosed and someone else carries the risk until someone actually decides to try and offload the assets securing the loans. (when the preorpty market gets back to bubble levels in 7/8 years accoridng to the latest ff ministers on this week)
• developers - also a little known sentence in NAMA appears to states that the assets can be developed by the debtor (no mention of insolvency or bankruptcy AFAIK Clause 148 ??)
  For example of this already in operation see Zoe/Carroll court cases where being banrolled by Anglo and AIB :rolleyes:
• builders - they get to work on these schemes that will be continued and the prices of the few houses the smaller developers/builders own still have artificially high value.
• fianna failure members - well a lot of them fall into some of the above categories and you can add in solicitors, estate agents, auctioneers who will probably be involved somewhere in the NAMA gravy train.

And lastly we have the taxpayers.

• Well they get to eventually borrow their own money albeit with increased bank charges, since as we all know the banks have to be profitable again.
• They will get to own a stake of some not so sellable property, either in this country or dotted in such far flung places as Sunny Beach, Florida, London, Dubai and God knows where else.
• Of course they are not going to be told how much this property was valued at when the loans that they secure were initially taken over from the banks and they aren't going to be told how much they will be sold for either, since that type of thing would be confidential.
• All the while taxpayers are going to be facing higher taxes, direct or indirect, and they will have to pay more for the even poorer services that they still do get.
• Some of the taxpayers future pensions form the pension reserve fund have already been pushed into the banks to keep them rolling AFAIK
• All the while the cost of irish borrowing has increased, outside investment won't want our dodgy methods of doing business all adding up to more woe for taxpayers

ifconfig

Help me here

From the banks perspective they need to wipe a total of say 90bn Euro worth of loans (some non performing and some performing as deemed by NAMA) off their books. NAMA will purchase these loans at some discount compared to this 90bn figure. Let's use the 60bn as the purchase price (it may be less if a harsher haircut is used because of more realistic valuations or shared risk as per Honohan prevails).

So when the banks get 60bn ECB exchangeable bonds and cashes them (?)
who bears the responsibility of recompensing the bond holders who effectively funded the loans in the first place ?
Assuming full protection is given to those bondholders then, since the security upon which their coupons & interest were based upon have been written off at a discount then someone has to step in and compensate them for the discounted amount that the loans were exchanged for ..?

If it is the banks, in the first instance - then I can see that inevitably the state will have to step in (via nationalisation) and further recapitalise but I am just asking which parties have liabilities with the bondholders once the planned NAMA transaction takes place.

PunkFreud

PunkFreud wrote: »

Okay, since I have said that I think NAMA is the best option available, and everyone here seems to disagree with me, will someone please explain to me why the Fine Gael or Labour idea is better.

Honestly, that is not rhetorical. I really want to know how and why NAMA is not the best option available.

Please, do not rant about it, just explain why the other two ideas are better.

Nevermind Labour or Fine Gael. The Guarantee is the problem. It binds us to the banks. If they fail we get screwed. The key then is to recapitalise them until the guarantee runs out and let them fail. The guarantee could be used to buy us time and start other banks to take their place.

We need banks, we dont need these banks.

Labour suggest taking complete control of the banks. We are liable which I dont like but it means we can sack those who need be sacked and we can have full control of the banks.

Fine Gael are suggesting taking the good stuff from the banks - the loans that look like they will be paid - and using it to create a good bank.

If we were capitalists we would let them fail and start new banks. If we were corrupt and protecting secrets we would have NAMA. Its the only bail out possibly that hides and protects those responsible.


Bear in mind that in several other countries those responsible have gone to jail. In fact the Japanese jailed some of their department of finance people in the late 90s

PunkFreud

Deleted User wrote: »

Nevermind Labour or Fine Gael. The Guarantee is the problem. It binds us to the banks. If they fail we get screwed. The key then is to recapitalise them until the guarantee runs out and let them fail. The guarantee could be used to buy us time and start other banks to take their place...

...We need banks, we dont need these banks...

...If we were capitalists we would let them fail and start new banks...

Yes, in a perfect capitalist society, we could allow them to fail, allowing newer banks to enter the market. The problem is (assuming we didn't have the bank guarantee) this would cost the tax payer even more. Every tax payer has a bank account. If a bank collapsed, then not only would they lose the money in their current accounts but their savings would be wiped out. Billions would be wiped out. Yes, in a perfect capitalist country this would happen, but personally I would like to keep my money.

You could say taking out all your money from the banks would stop you losing it, but in fact, this would just speed up the process of the bank collapsing. The banks are a very different company, as everyone gives them their money for safe keeping. We cannot allow the banks to fail. That is why not one of the political parties are putting forward that idea.

Were this to happen (with all the banks), I suppose the country would collapse and possibly anarchy? But maybe I'm going a bit overboard.

But that is beside the point: back to NAMA and discussing the alternatives.

ifconfig

Back to NAMA - once the banks are compensated (at a discount) for the book value of their loans. Does NAMA assume all the responsibility for the running of those loans including the obligations to the bondholders who originally funded those loans or is the plan that NAMA (via ECB) gives the banks the money to pay off the bondholders less the discount. And who bears the responsibility to recompense the bond holders for the written off amount ? or do the bondholders take a haircut even with NAMA in its current form ?

Sand

Help me here

From the banks perspective they need to wipe a total of say 90bn Euro worth of loans (some non performing and some performing as deemed by NAMA) off their books. NAMA will purchase these loans at some discount compared to this 90bn figure. Let's use the 60bn as the purchase price (it may be less if a harsher haircut is used because of more realistic valuations or shared risk as per Honohan prevails).

So when the banks get 60bn ECB exchangeable bonds and cashes them (?)
who bears the responsibility of recompensing the bond holders who effectively funded the loans in the first place ?

If you mean the government bonds given to the banks, the taxpayer. If you mean the bonds issued by the banks to investors, the bank. But seeing as the banks will not be allowed to fail, that means the taxpayer effectively.

Remember, even if the bank takes a haircut on the NAMA loans, it will make it up by increasing their variable rates on mortgage holders/taxpayers trapped in negative equity. Under NAMA the banks gets 60 billion. The taxpayer gets absolutely nothing ( no guaranteed credit availability, no moderation in profiteering on variable rates, etc, etc) except loans so impaired that its apparently vital for banks to find some suckers to sell them to.

@Punk

The problem is (assuming we didn't have the bank guarantee) this would cost the tax payer even more. Every tax payer has a bank account. If a bank collapsed, then not only would they lose the money in their current accounts but their savings would be wiped out.

No one is advocating leaving the depositors out to die. Just the shareholders and the junior bond holders.

back to NAMA and discussing the alternatives.

You could give me 60 billion for loans I made to various layabout losers and I will promise to lend it back to you at punitive rates of interest and profit for me.

Hmmm, thats a better deal than NAMA for the taxpayer....

The mental block Fianna Failers/Bankers/Builders/NAMA advocates have is they immediately discount any alternative where shareholders or junior bondholders take any loss whatsoever. All the loss must be on the taxpayer. Thats the purpose of NAMA.

ifconfig

Another thing which seems to be buried in the NAMA fog is that they plan to purchase a certain proportion of cherrypicked well performing loans which, according to Brian Lenihan, will be use to help pay out for the bonds purchased by the government.

Is this portfolio of good/bad loans purely commercial property loans ? Do all residential mortgages (good and bad) stay on the banks books ? are some distressed mortgages offloaded onto NAMA ? Sorry if this is a NAMA FAQ !

bangersandmash

Another benefit for the tax-payer.

BANKS and building societies set to put distressed loans into NAMA have been told to hold off increasing rates and fees for consumers until after the new agency is up and running, the Irish Independent has learned. This has prompted some analysts to conclude that there will be a deluge of banking price hikes once NAMA is set up.

...

Mr Rankin said it was also likely that banks would increase rates on other consumer products such as loans, mortgages, credit cards, overdrafts and current accounts.

Businesses are already paying more for banking services and this is likely for consumers, too, as banks seek to increase their profit margins.

http://www.independent.ie/business/personal-finance/savings-rates-set-to-fall-once-nama-is-set-up-analysts-say-1879120.html

Liam Byrne

bangersandmash wrote: »

Another benefit for the tax-payer.

Not sure about the "another", but at least there's one, I guess......every cloud and all that....

is_that_so

ifconfig wrote: »

Another thing which seems to be buried in the NAMA fog is that they plan to purchase a certain proportion of cherrypicked well performing loans which, according to Brian Lenihan, will be use to help pay out for the bonds purchased by the government.

Is this portfolio of good/bad loans purely commercial property loans ? Do all residential mortgages (good and bad) stay on the banks books ? are some distressed mortgages offloaded onto NAMA ? Sorry if this is a NAMA FAQ !

If a developer has a large enough loan to be considered then it will go to NAMA, distressed or not. These loans are the ones that are supposed to pay for the bad loans and in theory produce the profit some have claimed it will.

is_that_so

is_that_so wrote: »

If a developer has a large enough loan to be considered then it will go to NAMA, distressed or not. These loans are the ones that are supposed to pay for the bad loans and in theory produce the profit some have claimed it will.

But how can any large loan backed with vastly overpriced property be in any way good?

is_that_so

Rojomcdojo wrote: »

But how can any large loan backed with vastly overpriced property be in any way good?

There are some loans that banks would happily keep and other junk they'd love to offload to NAMA. That depends on the bank's perspective and the thorny issue of the valuation of all of these loans. If a company is in a position to keep paying the loan off then it is not distressed. It also means that the repayments from "good" loans can be used to balance out the distressed ones of which there appear to be a lot more of. At least that's the theory of it. It could also be a loan accumulated over a longer period of time backed by more secure assets or one that still represents a very low LTV.

johnlamp

Hey PunkFreud; I agree with you I think NAMA might help but that doesnt mean I want this government, I cam across this blog on myhome.ie this morning and the comments really show a divide in what people think...there are some like you and me but others are just againist NAMA because the government we have which is wrong.

Check out some of these comments @ http://blog.myhome.ie/post/NAMA-is-coming-will-it-save-us.aspx

PunkFreud

^^^^ I'm glad someone agrees with me ^^^^^^

Anyways, there seems to be alot of NAMA bashing ITT, which was not exactly what I was hoping for...

What I wanted, was for people to say why they thought the other ideas were better. Has anyone noticed the title of the thread? I said it "wasn't great", but it was the best option available. I hope people will stop bashing it and explaining why they believe the opposition's ideas to be better.

And no, giving your own ideas doesn't count, that's why I said it was the best option available.

So please, I honestly want people to say why the opposition's ideas are better.

Sand

^^^^ I'm glad someone agrees with me ^^^^^^

JonLamp has got 2 posts, my spider sense is tingling given the massive Fianna Fail campaign to persuade us giving all this cash to self interested bankers is in our own interest.

Right, one post in favour of NAMA plugging a property blog, another post against a property tax, plugging a property blog. All in one day.

Yeah, must have been a huge surprise him showing up to agree with you.

****, theres spambots more subtle than that.

Anyways, there seems to be alot of NAMA bashing ITT, which was not exactly what I was hoping for...

Of course not. Unfortunately the average Irish person has stopped shoving industrial quantities of coke up their noses to become angels since the crash, so ideas so stupidly wrong as NAMA tend to get a bit more criticism.

And no, giving your own ideas doesn't count, that's why I said it was the best option available.

FGs good bank idea creates a bank to lend directly to the economy.

FFs plan is to give a **** load of taxpayer cash to bad banks and hope they lend to the economy.

Maybe you can figure out the best concept.

So please, I honestly want people to say why the opposition's ideas are better.

You've already seen them multipiule times in this thread...but youre not on this thread to learn. Youre on this thread to advocate to others.

Interesting how every single ****ing article on NAMA where the writer is in favour of NAMA, the writer is a member of Fianna Fail, a banker, a member of the property sector or a member of the public sector.

Every single independant source disagress with NAMA. Even the Swedes who are quite determined to announce that NAMA bears no relation to the model they used for their bank crisis, despte FF propaganda to the contrary.

bangersandmash

Liam Byrne wrote: »

Not sure about the "another", but at least there's one, I guess......every cloud and all that....

I was probably being a little facetious there. It's just a little ironic that the government are portraying NAMA as a means of getting cash flowing again for the average tax-payer.

In reality tax-payers are likely going to subsequently feel the effects of increased mortgage rates, increased banking fees, decreased savings deposit rates, not to mention all the tax increases that will be required to fund NAMA. And that's before you consider the longer term effects of artificially propping up a stagnant property market, and the prolonged reduction in Irish competitiveness which it brings.

oceanclub

Gene Kerrigan makes a very good point today. We saw how RTE made a big deal of the fact that Garret Fitzgerald came out for NAMA.

Well, Bo Lungren, the Swedish politican who was behind the Swedish version of NAMA, has severely criticised our version, and the silence of deafening. No mention in the papers or second spot on the 9 o'clock news for Bo:

http://www.independent.ie/opinion/columnists/gene-kerrigan/brainwashed-by-only-game-in-town-1879562.html

On Thursday, RTE's Morning Ireland ran an interview with Bo. He said that Sweden temporarily nationalised the banks in the Nineties.

In this crisis, you have to, to ensure the taxpayer isn't ripped off. "If you own both entities," -- the bank selling the bad debt and the one buying it -- "valuation is not a problem". But our Government says no one would later buy the clean banks. Bo dismissed this as nonsense. "I can't see that as a problem".

Labour's Joan Burton said Bo's intervention would put nationalisation back at centre stage. After all, Bo is the Government's hero. They claim they're following in his footsteps.

Academic economist Brian Lucey said: "I suspect that he will be loudly ignored."

And he was. RTE didn't pick it up as a significant development in the debate. Not a word in the newspapers next day.

Had Bo weighed in behind the Two Brians, I've no doubt he would have made the headlines.

P.

is_that_so

oceanclub wrote: »

Gene Kerrigan makes a very good point today. We saw how RTE made a big deal of the fact that Garret Fitzgerald came out for NAMA.

Well, Bo Lungren, the Swedish politican who was behind the Swedish version of NAMA, has severely criticised our version, and the silence of deafening. No mention in the papers or second spot on the 9 o'clock news for Bo:

http://www.independent.ie/opinion/columnists/gene-kerrigan/brainwashed-by-only-game-in-town-1879562.html



P.

OT I personally get fed up with RTE rehashing their lunchtime news three times a day and welcome the variety when they have new items or drop earlier ones.

This is actually what Lundgren said and an interesting listen. Sweden also have the advantage of having more control over their economy and not having to check with the ECB. He got five minutes on Morning Ireland - which is a lot, and apparently merited a slot on 6.1 as well. He doesn't actually criticise it in the way that Kerrigan says as it is not the Swedish way to "severely criticise" anything outside their country.

He does favour intervention and explains what the Swedes did. A lot of what he says does make sense but there is really nothing new in it that we haven't already heard and it is no more or no less than some of the ideas the Brian Lucey is proposing. Pity he can't do it without spouting oxymoronic soundbytes.

This is just a typical Sindo rant dressed up as journalism. As far as I can see it's only getting mention here because it blindly bangs the drum for one side and feeds the absolute rage that some people feel for NAMA. The anger I can understand, the naked exploitation of this anger IMO sums up what the Sindo is all about.

Saadyst

I saw this, and was cracking up: http://www.irishtimes.com/newspaper/breaking/2009/0906/breaking17.htm

Ex-Fine Gael leader Alan Dukes has labelled his former party’s solution to the banking crisis as “cumbersome”.

Speaking today Mr Dukes described the Fine Gael plan of creating recovery banks as “very cumbersome, very doubtful of success and much less clear than the Nama (National Asset Management Agecy) proposal.”

.....

Mr Dukes who was appointed to the board of the nationalised Anglo Irish Bank by the Government told RTÉ’s This Week programme that Nama is the “best of the proposals on the table”.

Couldn't make this up.

Cork Boy

Mr Dukes - Money talks and while you may wish to be forever in blue jeans, I can see your blue shirt has been thrown out in favour of your nice new Louis Copeland number.

Christ, is nothing sacred anymore?

thebman

Saadyst wrote: »

I saw this, and was cracking up: http://www.irishtimes.com/newspaper/breaking/2009/0906/breaking17.htm



Couldn't make this up.

Insanely biased reporting by RTE on the matter IMO.

Lol they changed their article already

Sand

Itd be interesting to review all the articles written in favour of NAMA over the past 2 months and see how many are written by members of the Fianna Fail/Bankers/Developers axis and how many are not.

And of those who are "independant" and in favour, how many have any economic knowledge to speak of.

old boy

Sand wrote: »

Itd be interesting to review all the articles written in favour of NAMA over the past 2 months and see how many are written by members of the Fianna Fail/Bankers/Developers axis and how many are not.

And of those who are "independant" and in favour, how many have any economic knowledge to speak of.

does one not recogonise schite by the smell, or has one to have a degree to be able to do so,

Niall Keane

Ok, NAMA. With NAMA, we would buying €80bn worth of loans for €60bn (remember, they weren't 100% loans, so the value of property bought would be higher). With no bad loans in the banks, they would be better able to lend again, meaning more loans for small businesses. The state could then sell off the loans/property in a number of years, and a profit could be made (it is highly unlikely that the value of property would fall again and again for the next few years).

All the residential properties were designed to in their day minimum sizes and standards now obsolete. We’ll never sell them in the future; cheaper (with reduced labour and material costs) homes will become available. The new developers will need to actually entice people to buy, gone are the days of buying a money making box you’d never live in. So we will soon see apartments the size of German and US models, i.e. capable of providing ample space and storage for family life.

The commercial portfolio has been designed by in large before 2005, to those standards, now vastly improved upon in the area of natural ventilation, air tightness and insulation. Simply it will cost a fortune compared to future offices to maintain these relics. Also will they suffer a future carbon tax for being such dinosaurs?

The land banks will have their permission run out, and An Bord Pleanala will probably refuse any further applications on sustainability grounds, they will need to be rezoned as agricultural if we can sell them at all. No profit there.

So, no NAMA can’t work, Fianna Fail must be well aware of this having been in bed with the largest developers for over a decade, so what are they hiding, what are they being threatened with? I think this move will be their political suicide, but it probably beats prison time, or CAB seizing their assets?

PunkFreud

I'm tired of everyone ignoring the point of this thread. It's basically all replies saying: "Nama is awful" or "Shut up and go back to Fianna Fail". No-one understood the point of it: Discuss the opposition ideas. Once people saw "NAMA", they were off and running talking about how they think its a bad idea. Almost no-one bothered to mention the opposition ideas even once, and those who did wrote 1 sentence on them. That is not enough to prove that the opposition's ideas are better.

I made pretty flimsy arguments as to why the oppositions' ideas are not the better (though I am still of the view that NAMA is the best option available). I did that in order to spark debate. But that flew right over the heads of most people. All they saw was that I was in favour of NAMA and thought it was a brilliant idea (which I never said). All the plans are flawed, I just think NAMA is the least flawed of them all.

Oh, I just have to mention blindjustice's reply (which is underneath this). I actually can't believe someone would even advocate that idea. What makes it worse is that people actually thanked him. I showed under why that would be an even worse the worst idea under it. A perfect capitalist world doesn't work. I remember hearing this example before. If you had a 2 year old daughter in your family, would you feed her on the basis of her income? That's an extreme example, but it shows how perfect capitalism wouldn't work.

Deleted User wrote: »

Nevermind Labour or Fine Gael. The Guarantee is the problem. It binds us to the banks. If they fail we get screwed. The key then is to recapitalise them until the guarantee runs out and let them fail. The guarantee could be used to buy us time and start other banks to take their place.

We need banks, we dont need these banks.

Labour suggest taking complete control of the banks. We are liable which I dont like but it means we can sack those who need be sacked and we can have full control of the banks.

Fine Gael are suggesting taking the good stuff from the banks - the loans that look like they will be paid - and using it to create a good bank.

If we were capitalists we would let them fail and start new banks. If we were corrupt and protecting secrets we would have NAMA. Its the only bail out possibly that hides and protects those responsible.


Bear in mind that in several other countries those responsible have gone to jail. In fact the Japanese jailed some of their department of finance people in the late 90s __________________
www.thepropertypin.com
Have Gun, Will Travel

jmayo

PunkFreud wrote: »

I'm tired of everyone ignoring the point of this thread. It's basically all replies saying: "Nama is awful" or "Shut up and go back to Fianna Fail". No-one understood the point of it: Discuss the opposition ideas. Once people saw "NAMA", they were off and running talking about how they think its a bad idea. Almost no-one bothered to mention the opposition ideas even once, and those who did wrote 1 sentence on them. That is not enough to prove that the opposition's ideas are better.

I made pretty flimsy arguments as to why the oppositions' ideas are not the better (though I am still of the view that NAMA is the best option available). I did that in order to spark debate. But that flew right over the heads of most people. All they saw was that I was in favour of NAMA and thought it was a brilliant idea (which I never said). All the plans are flawed, I just think NAMA is the least flawed of them all.

Oh, I just have to mention blindjustice's reply (which is underneath this). I actually can't believe someone would even advocate that idea. What makes it worse is that people actually thanked him. I showed under why that would be an even worse the worst idea under it...

Oh perish the thought I thanked blindjustice because I agreed that the bank gauarantee as constituted by the law lecturer that is our finance minister is what will screw us in the end.
We guaranteed utter sh**e.

Also I agree that some financial people in this country should be seeing the inside of a jail cell.

You have now complained a couple of times, I believe, about how no one is examining the opposition plans and are just complaining about the government NAMA plans.
You are using the same tactics as those complaining that marcherers shouldn't march unless they have a counter proposal to NAMA.
Funny how you take the same slant and funny how you have suddently taken to posting on politics forum as NAMA debate hots up.

If you look across the threads on NAMA you will find people offering opinions on counter proposals such as what the Swedes did, on nationalisation, on a good bank and on having transparency in NAMA.
Posters are pointing out the huge gaping flaws and downfalls with NAMA, but it appears you want them to ignore these and specifically attack the opposition proposals in order to increase the attractiveness of NAMA.

You questioned FGs proposal.
You labelled Labour's proposal as daft or silly.
Is it any more ludicrous than paying above the odds for the assets securing huge loans, so that a banks' bond holders and shareholders will walk away with something, whereas the only chance the taxpayer walks away with anything is if the property bubble reoccurrs within a decade or so ?
Is it anymore ludicrous than having the NAMA backed non lending banks offering to lend even more money to the developers who are already insolvent on the oft chance that the property bubble resurrects itself ?

lmimmfn

ok so with NAMA WTF is going to happen all the assets while the 'government' have them( i use that term lightly ) other than the greens wanting to grab a load of land for green areas?

Niall Keane

Jmayo:

whereas the only chance the taxpayer walks away with anything is if the property bubble reoccurs within a decade or so ?

I believe that it’s worse than this; everyone seems to think that when or if the boom returns we’ll be able to sell. I’ve outlined my opinion on this post #117.

Basically, buildings despite the Irish fondness for Georgian pastiche, and colloquial neo-classical columns on porches and pitched roofs, have not been constructed in the same manner, employing the same technologies and to the same sizes / standards since the beginning of time. The regulations on insulation standards and energy efficiency have changed I think, four times this decade, not to mention the various amendments.

It would be the same as buying all the leaded petrol, no power steering, no air-bags cars in 1989 and trying to sell them now. Not classic models mind you but the type requiring a 20 minute start up in the morning back then.

As for renovation of the NAMA portfolio when the time comes, using the shells provided, it is generally more expensive than to new build! So bar a Mad Max scenario I can’t see these buildings ever being used in 20-30 years time, never mind being purchased!

Alternative:

Use the €90b instead to write off 50% of the value of everyone’s mortgage, banks will be recapitalised, everyone will have more spending power so the recession will end, let the banks pursue the toxic debts themselves, they can decide whether or not to further capitalise potential profitable development. They won't be in danger any longer, so no need for stupid "we have to keep throwing money into obviously flawed pyramid development schemes or the universe will collapse" strategies will occur, where as that is exactly what NAMA currently proposes.